Fisher Maritime's Fairleads

'Lessons Learned' Strategies & Ideas for the Marine Industry


LESSON LEARNED #35: Confirm With Vendors Before Specifying

Lesson Learned

A vessel owner’s team set out to increase the refrigeration capacity of the vessel. Among other new components, this required the installation of several additional 250-amp breakers identical to ones already on the vessel. The owner’s staff read the part number for the existing breakers, and directed the shipyard to order additional breakers using that part number to ensure commonality. What arrived, however, were only the casings for the breakers, not fitted with the internals. A separate part number was need for the internals, or an alternate part number for the combination of the internals plus casing. A last-minute contract amendment and extra installation costs were incurred.

The lesson learned: the owner’s specification writers should confirm from the vendor that the identified part number is the appropriate one and that the product is currently being manufactured.


Floating Drydock Module Replacement

Fisher Maritime assisted a shipyard in the resolution of a dispute over the value of repairs to their floating drydock which was severely damaged while lifting a vessel. The damage to the drydock was found to have been the result of lack of compliance with the dock pumping plan; the ship was not damaged.  Due to limits on a loss-of-use insurance policy, the shipyard’s survival was dependent on the drydock not being out of service for an extended period. Upon assessing the extent of damage to the floating drydock, the shipyard immediately arranged for and managed repairs by wholesale replacement of modules of the floating drydock. This was commenced before reaching an agreement with the underwriters as to the amount to be reimbursed by the Hull and Machinery insurance policy.

The shipyard’s method of repair seemed extreme to the underwriter but, in the end, was demonstrated by Fisher Maritime to have been technically-superior and far more economical than the underwriter’s suggested method. The full extent of the damage to the drydock was not known when the underwriters initially developed a cut -and-patch repair specification based largely on an external visual inspection only.

The anticipated cost of repair of the initially identified damage under this method already approached half the value of the policy.  However, there was a high probability that the drydock was damaged to a greater extent than visually noted at the outset, thereby making it beyond economical repair with the underwriter’s proposed cut-and-patch method. It was likely that there would be considerable growth work and the dry dock would be declared a constructive total loss sometime before completion of the proposed repair. This would leave the shipyard without a drydock for an uncertain amount of time. Instead the shipyard took action to obtain a more timely, successful repair.

Using less-expensive replacement modules obtained from an oversees shipyard having low steel work costs. the drydock was repaired for a cost below the total constructive loss threshold but above the underwriter’s initial estimate for a patchwork repair.  Those total costs were lower even though they included transportation of the entire floating drydock across the ocean on a heavy lift ship for replacement of the structural modules.

The shipyard and underwriter had disagreed as to the fair value of the repairs.  Without adequate reimbursement being offered, the shipyard sued the underwriter. The law firm representing the shipyard, being familiar with Fisher Maritime’s capabilities and successes from previous assignments, asked it to provide expert assistance. Fisher Maritime developed an analysis of the shortcomings in the underwriter’s repair specification and the associated repair estimate. The Fisher Maritime report then assessed the reasonableness and subsequent cost-effectiveness, as well as shorter schedule, of the shipyard’s repair method.  Following presentation of the Fisher Maritime analysis, the matter was resolved before trial to the satisfaction of the shipyard.